Tariffs are the wrong approach to dealing with problems related to China's industrial policies and trade practices, US Chamber of Commerce President Thomas Donohue told the Trump administration. Photo: Bloomberg

US business lobby group warns Trump against China tariffs

The US Chamber of Commerce warned the Trump administration that unilateral tariffs on Chinese goods could lead to a destructive trade war that will hurt American consumers and US economic growth.

The chamber’s president, Thomas Donohue, said in a statement Thursday that such tariffs would mean “damaging taxes on American consumers”, Reuters reports.

The Trump administration is right to focus on the negative economic impact of China’s industrial policies and unfair trade practices, but tariffs are the wrong approach to dealing with these, Donohue said.

“Tariffs of $30 billion a year would wipe out over a third of the savings American families received from the doubling of the standard deduction in tax reform,” he said. “If the tariffs reach $60 billion, which has been rumored, the impact would be even more devastating.”

Donohue urged the administration not to proceed with such a plan.

“Tariffs could lead to a destructive trade war with serious consequences for US economic growth and job creation,” hurting consumers, businesses, farmers and ranchers, he said.

The comments from the head of America’s largest business lobbying group came as White House trade adviser Peter Navarro said that Trump would in coming weeks get options to address China’s “theft and forced transfer” of American intellectual property as part of an investigation.

Reuters reported on Tuesday that Trump was considering tariffs on up to US$60 billion worth of Chinese IT, telecoms and consumer products, along with US investment restrictions for Chinese firms.

Navarro, speaking on CNBC television, said the remedies in the “Section 301″ probe were among “many steps that the president is courageously going to take in order to address unfair trade practices.”

“I don’t think there’s a single person … on Wall Street that will oppose cracking down on China’s theft of our intellectual property or their forced transfer,” Navarro added.

Navarro, a key architect of steel and aluminum tariffs announced last week by Trump, said tariffs will not necessarily provoke a trade war.

“We can obviously do it in a way that can be good for the American people and good for the global trading system,” he said. “We can do this in a way that is peaceful and will improve and strengthen the trading system.”

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